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Kathy Cummings: No sign of CBA broker commission hike, despite record profit

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Australian Broker | 16 Aug 2013, 08:00 AM Agree 0
CBA's broker remuneration is 'in line' with the market and the bank is already 'very competitive' when it comes to commissions, says executive general manager, third party, Kathy Cummings
  • Regional Broker | 16 Aug 2013, 10:19 AM Agree 0
    No Trailer in year one IS NOT in line with the market , it is a reason why I use the CBA as little as possible. The arrogance of the comments attributed to Ms Cummings is astounding. Second point most reworks I have had in the last 12 months are a CBA processing fault not mine
    !.
  • mike smith | 16 Aug 2013, 10:20 AM Agree 0
    Kathy simple.
    Bring back first year trail like all other mainstream funders!!!
    You can afford it with little excuse any more.
  • Sydney Broker | 16 Aug 2013, 10:42 AM Agree 0
    Anyone who uses Broker Connect is an absolute fool. The only relationship that gets strengthened is the relationship between the bank and your client!
    Brokers MUST ensure that clients have a range of product providers and the primary relationships is with them NOT CBA or any other Bank.
    Does anyone seriously use Broker Connect?
    One more point - Banks ar ethe LAST PEOPLE ON EARTH that should discuss productivity. Their service is worse today than it was in the middle of the last Boom - even though the broker now does all the front end data entry! There systems (and staff in many cases) are full of incompetence, laziness, excuses and inefficiencies.
  • Positive Broker | 16 Aug 2013, 10:47 AM Agree 0
    Sorry CBA. Like Regional Broker I have removed CBA from my lending panel because the constant processing errors were having a negative productivity impact on my business. I imagine most brokers will see through this kind of corporate BS. Maybe Kathy should be in politics.
  • ozboy | 16 Aug 2013, 11:06 AM Agree 0
    Broken record!
  • Stephen Dinte | 16 Aug 2013, 11:51 AM Agree 0
    There is a certain irony that whilst there is seemingly a large number of brokers bleating (as in sheep!) about the fact that CBA do not pay trail in year one, they nonetheless continue to send business that way. Obviously a number of thinking brokers have realised that actions speak louder than words, and have simply removed CBA from their lending panel. Not having CBA on my list has not harmed my volumes in any way.
  • Scott Beattie | 16 Aug 2013, 12:14 PM Agree 0
    So, going on that logic, as the execs salaries are in line with others and therefore competitive, they won't expect a pay raise either??
  • CW | 16 Aug 2013, 12:29 PM Agree 0
    I seem to recall during the GFC seeing some "compelling" (from the banks point of view anyway) slideshows and presentations regarding how the cost of funds had soared and how we as partners with the bank had to take our fair share of the reduction in their margin by taking a hit to our commissions. Opportunistic was one word that came to mind given it was clear that when the spike in the cost of funds reduced, this wouldn't be passed back on to us by raising the commissions back to where they were. Considering all of the additional products the client gets when they are referred to a bank are not factored into the equation when considering the true profit of the model. Add to this clawback of commission and given most new to bank clients are driven to banks from the broker channel, we were taken advantage of all on the basis of a temporary spike in the banks cost of funds.
    Have a look at the spread between the cash rate and the banks rate pre GFC and now, approx 120 points, pretty much the same as the difference in cost of funds even when washing it all together with higher deposit rates, etc etc. So given this spread has now put the banks back to the same position pre GFC, which is being confirmed in their profit figures, it is staggering to hear an argument that trail in year 1 should not be reinstated. In fact 0.25% should be the norm from day 1 across the board. Am happy to give a bit as i have done for the last 5 years so you can leave the upfront at 0.6%. Trail is the backbone of everyone's business, the sooner it is back at 0.25% from day 1, the better. Assuming there is no difference to the client, anyone not paying from day 1 will only get business if it cant go somewhere else.
    TRAIL DAY 1 KATHY - 0.25% THEN YOU WOULD BE SHOWING YOURSELVES TO BE TRULY PARTNERING WITH THE CHANNEL AND SHARING SOME OF YOUR RECORD PROFIT JUST AS YOU MADE US SHARE SOME OF YOUR REDUCED MARGINS DURING THE BAD TIMES!
  • mac | 16 Aug 2013, 01:11 PM Agree 0
    Trail year 1 CBA. I suggest you do it before you loose your job and more market share
  • Broker | 16 Aug 2013, 01:34 PM Agree 0
    Which is why I avoid CBA , I can't stand the arrogance, amongst a host of other issues.
  • Steve McClure | 16 Aug 2013, 01:43 PM Agree 0
    Stephen Dinte, if as a "thinking broker", you have removed CBA from your list because they don't pay trails in year 1 its your decision. But it's reasoning your clients should be aware of so that they know their choice (if you offer that) is affected by it. Some of my clients like/choose CBA and I would also like trails in year 1. But that doesn't mean I'm bleating if I advocate trail structure change, or not thinking when I write loans with lenders that don't pay year 1. There's wider obligations.
  • SIDBROKER | 16 Aug 2013, 01:53 PM Agree 0
    I have never had them on my panel.I have never felt comfortable with arrogance.
  • rob | 16 Aug 2013, 02:34 PM Agree 0
    there's nothing "Lean" about the CBA processes..Kaizen means change for the better. That's what I did, changed away from CBA for the better, happier clients, better referrals and more profitable business.
  • Ray C | 16 Aug 2013, 03:38 PM Agree 0
    No Special Bonus for Shareholders, no increase in commission for Brokers, Aussie Broker of the year, CBA Brokers Bank of Year again.
    I bet Kathy will get a bonus and the CEO.
    When will brokers wake up and not deal with the CBA.
  • Positive Broker | 16 Aug 2013, 10:38 PM Agree 0
    Trail in year one won't make me use CBA. Three very unhappy clients in a row came within a whisper of missing settlement dates due to CBA incompetence. No amount of commission is worth the damage to my client base.
  • Stephen Dinte | 19 Aug 2013, 10:04 AM Agree 0
    Steve McClure. Apologies for the misunderstanding. I removed CBA from my panel some years ago when they introduced volume hurdles, which meant sending them business simply to retain accreditation. I did the same with Westpac. It has nought to do with year one trails. From the majority of comments posted, it would seem that I am not alone in my distain. I happily explain to my clients why those two majors are not on my panel. After 19 successful years in this industry, I am in a fortunate position where I no longer have to give any consideration to what I will earn from a deal. My measure of success in now based solely on the number of referrals from existing clients.
  • Onj | 16 Nov 2013, 03:41 PM Agree 0
    Reading your comments Brokers, this is why you are considered Cowboys, You don't write CBA because your own pocket is hurt. What about the customer, those who have posted comments should have the MFAA strike you off but they are Ned Kelly gang anyway
  • Marty | 18 Nov 2013, 07:34 AM Agree 0
    Nice try Onj. We are nudging 50% market share so could hardly be considered cowboys. All we want is a level playing field remuneration wise. You dont quiet understand that the delivery rate to the consumer doesnt have to be affected by the commissions the lender pays the broker. Increased commission can be absorbed by the bank as reduced margin or vice versa in the case of lenders who don't pay trail in yr 1 like CBA.
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